• A Real Estate AIF allows an investor to participate directly in the development process, which may lead to higher yields through a more stable investment.
• A Real Estate AIF allows an investor to invest in real estate through a fund route. A Real Estate AIF has strategy focussing on specific segment (residential, commercial etc.), stage (early stage, mid stage or completed etc.), structure (debt, equity, mezzanine etc.)
• Unlike physical assets, returns from RE financial product may not always dependent on price rise in the property but also rely on business profitability/ margins.
• The returns are typically generated from the operations of the business i.e. business profitability.
• The higher up the value chain one goes, the less volatile returns are. Operating margins generated by business operations typically show less fluctuation.
• These are paper instruments backed by an actual physical asset, having inherent, appreciating, realizable market value.

• Real estate is an attractive asset class, however it faces challenges of complexity, liquidity and higher ticket size. It offers a wide range of choices with respect to city, type and every choice has risk associated with it. That’s why there is a need to diversify, which is a fundamental part of risk management. A structured fund like ours allows for diversification in terms of developer and geography, power of collective negotiations, providing substantially lower entry points, securing preferred repayment, higher due diligence, collaborative asset management by professionals and low overhead costs. The entire investment is backed by research and well thought through strategy.
  • The funds are managed by qualified professionals
  • With a structure like alternatives, a fund is in a unique position to overcome the challenges and deliver returns to investors.

A Category II AIF cannot invest more than 25% of its investible funds (Target fund size – Rs 350 Cr + Rs 350 Cr Green Shoe) in any one investee company directly or through investment in the units of other AIFs. Also to diversify and de-risk, the fund may invest in 6–8 different projects across the top 8 cities.

The targeted investment amount per deal may be in the range of INR 30 Cr to INR 70 Cr.

This is a 6 year closed ended fund. Technically there is no exit option. However, the units are transferable to another interested party as per the transfer provisions mentioned in the scheme documents. It may be noted that the transferee needs to find out the perspective buyer in this case.

• The Meenakshi Real Assets Fund (M-Alts) has a preferred return of 12% p.a. and a carried interest of 15% p.a. (with full catch up)
• On an illustrative basis, consider a case where the fund generates 16% returns post expenses. The distribution will happen in the following manner:
• The investor will receive the amount invested + 12%
• The next 2.12% (12% x 15% / 85%) would be given to the fund manager as catch-up. (Any applicable GST on catch-up will be borne by the investor)
• The balance returns 1.88% (16% - 14.12%) would Shared in the proportion of 85%:15% between the client and the Sponsor

Following will be shared including regulatory communication with investors –

• Fund Update – quarterly
• Update on fund progress as and when required – need basis
• Statement of account – quarterly
• Advance tax statement – quarterly
• Income statement – annually

Other communications –

• Welcome Letter (sent along with SoA post initial allotment of units on contribution amount)
• Draw down letters (intimating investors about the due date and percentage of commitment due)
• Draw down letter – Reminders (Intimating the penalty clause for pending investors). Draw Down allotment confirmation (usually SoAs reflecting the allotment are shared).